JOHANNESBURG, (Reuters) – Western investors have to realise South Africa does not need their money since it can turn increasingly to fellow BRICS members India and China to fund its economic development, the Secretary-General of its ruling ANC said yesterday.
“There is a dynamic that Western investors must wake up to,” Gwede Mantashe, day-to-day head of the African National Congress, told Reuters in an interview.
“If they are still sulking regularly, there is a growing ‘Look East’ tendency that is emerging throughout the continent, the developing world.”
The left-leaning ANC is deeply suspicious of the West, resenting what it sees as high-handedness by the United States and Africa’s former European colonial powers and distrusting free market capitalism.
It also objects to conditions often imposed by Western institutions as the price of their investment.
“Sometimes, when you deal with the IMF or World Bank, or anything, they feel that you must stop thinking because they have money and they will tell you what to do with the money,” Mantashe, a former union leader, said.
“As long as that is the case, you are going to see the fast growth of the ‘Look East’ policy,” he said.
China provides investment with far fewer strings attached, while its approach is perceived as more tactful. As a result it has become South Africa’s biggest trading partner.
Last year South Africa exported goods worth 90.2 billion rand ($10.95 billion) to China, more than twice exports to Germany and about eight times more than those to Britain. South Africa’s trade deficit with China was about $3 billion.
South Africa joined the BRICS group of emerging economic powers Brazil, Russia, India and China in early 2011, and has made clear its desire to emulate the Chinese and Brazilian models of state intervention in the economy.
Mantashe and other top ANC officials have taken several trips to China to see how it uses state-owned industry to power its economy.
“The BRICS development bank is going to be a reality and that is where we look for money and funding because developing economies must be allowed to grow and develop,” he said.
Meanwhile the ANC has shown its distrust for Western firms, for example by trying, unsuccessfully, to roll back approval for Wal-Mart’s $2.4 billion acquisition of retailer Massmart .
“A MOUSE FROM THE BUSH”
Mantashe also admitted the ANC, which has ruled Africa’s biggest economy since the end of apartheid in 1994, was in a mess. But he said it was cleaning up the in-fighting and corruption scandals that have eroded its authority.
Mantashe said part of the problem lay in the deployment of inexperienced ANC cadres to bureaucratic posts commanding huge and complex budgets.
“It is like taking a mouse from the bush and making it run a cheese factory,” he said.
“The mess we are dealing with now grew up over a long period of time,” he said. “We are mopping up. Once we are able to mop up the mess, it means we are not dysfunctional.”
All three major global ratings agencies have downgraded their outlook for South Africa, saying President Jacob Zuma’s government is on the wrong track, with graft, a wide budget deficit and a poor education system clouding the future. Zuma’s government has made progress in building houses and providing running water, power and health care but it also faces hundreds of protests each year from people saying more must be done and accusing local officials of lining their pockets.